Government approves economic aid package

Shmuli calls plan ‘noose’ solution to coronavirus financial crisis • PM ‘failed horribly,’ Lapid says

By HAGAY HACOHEN
Prime Minister Benjamin Netanyahu attends the government cabinet meeting, June 28, 2020 (photo credit: OLIVIER FITOUSSI/FLASH90)
Prime Minister Benjamin Netanyahu attends the government cabinet meeting, June 28, 2020
(photo credit: OLIVIER FITOUSSI/FLASH90)
The first part of Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz’s NIS 80 billion rescue program, meant to offer stability to Israel after COVID-19 has pushed every fifth person in the country to unemployment, was approved on Sunday. The second part is meant to be presented on Monday.
Netanyahu tweeted on Sunday evening he “hears your cry for help” and the entire cabinet voted in favor of the new measures. “We are,” he said, “to solve the problems.”
Katz tweeted earlier “on Tuesday, people could open their bank accounts and see the money,” a day earlier than previous reports suggested.
“Just as we said”, Katz said, “we promise, and we keep our promises.”
The plan is meant to offer unemployment benefits until June 2021 or until the unemployment rate drops to 10% from its current 21%. It includes scaled aid to businesses to ensure jobs, assurance to purchase Israeli-made goods and perks to help the elderly and soldiers fresh out of service.
Despite the promises made that the unemployed, barred from their professions by the Health Ministry’s COVID-19 regulations, will receive NIS 7,500 by Wednesday, the real sum will be NIS 4,700, Channel 13 reported Sunday.
Netanyahu “doesn’t know how to manage things,” Yesh Atid leader Yair Lapid said, adding that he sees the logic in pushing a half-year budget because “nobody can predict how much income the country will have in the next six months.”
Lapid pointed to Germany, a country “10 times larger than Israel” that beat Israel on both fronts – coronavirus and economics – as Germany now has 4% unemployment. Lapid called the situation across the country “a horrible failure of Netanyahu,” Channel 13 reported.
The cabinet debate on Sunday was intense when  Labor, Social Affairs and Social Services Minister Itzik Shmuli (Labor) raged against the promised NIS 7,5000 grants to the self-employed now out of a job saying it not a lifeline but a noose. The Tax Authority is set to wire the payments to 400,000 people in the next few days. When he asked that each COVID-19 health restriction be discussed individually, Netanyahu rebuked him, saying, “Don’t use slogans with me. You are a minister in this government; we are all responsible,” KAN reported Sunday.
“I did not enter the coalition to scratch anyone’s back,” Shmuli said on Sunday in an interview with KAN Radio. He said he would continue to speak his mind in future cabinet meetings as well.
Shmuli explained that to get the grant, a business owner under the current plan must prove a loss of 40%, almost double the losses business owners need to prove to get state aid if they live in a zone suffering from a violent conflict such as a Gaza border community during Operation Protective Edge in 2014, where a loss of 25% needed to be demonstrated.
Israel should adopt the German model of benefits, meaning employers should be encouraged to keep workers even in reduced positions, he said.
The plan’s release last Thursday did not prevent an estimated 80,000 people from protesting in Tel Aviv’s Rabin Square on Saturday evening, with some carrying signs calling it a “war for bread” and voicing their bitterness over what they perceive as the state’s inability to feel their pain and offer help.
Many among the protesters were business owners who feel they have been giving to the state for decades, paying fairly high taxes, and now, when they need a break, the government is ignoring them.
Netanyahu met with a delegation of protesters on Friday and promised them weekly meetings to assure better communication. But the protest went ahead as planned.
The Saturday demonstration was joined by the Black Flag protest movement, which is focused on Netanyahu’s indictments for bribery and breach of trust – which took over dozens of bridges and intersections over the weekend – and the social workers’ protest that has been going on for more than a week.
When Katz was headed to a television studio to speak on Channel 12’s Meet the Press, protesters greeted him with signs that suggested he “Meet the Reality.”
On Sunday, Social Equality Minister Meirav Cohen said: “Since this crisis began, promises worth NIS 100 billion have been floated into the air, and we are here to make sure the money will be delivered.” She said her party, Blue and White, was committed to offer a plan with “growth engines and long-term plans.”
The plan is said to be focused on offering immediate financial help to those who were badly affected by the Health Ministry’s regulations, such as tour guides, musicians and restaurant owners. Israel has traditionally limited unemployment benefits to a few months with the intention that people should be encouraged to seek work.
When asked how he plans to fund a year of benefits, Netanyahu on Thursday said Israel’s economy was doing very well, and “we should not be afraid to take loans.”
THE BANK of Israel reported that the expected deficit the country will face due to Netanyahu’s plan will be NIS 170b. This is the “highest deficit since the 1980s,” Channel 13 reported.
The cost of the Netanyahu-Katz “safety net” would be NIS 15b. in 2020 and another NIS 27b. in 2021, the Bank of Israel said.
“I want to stress that the government has the means to fund the plan,” Bank of Israel Governor Amir Yaron said Sunday in a press release.
On Meet the Press, Katz was asked why he was not learning from France, where President Emmanuel Macron reportedly championed a national vocational training program.
Katz said his plan also includes a path for teaching people new skills that will help them land a job in, for example, digitalization.
Bank Hapoalim, in cooperation with the Hadassah Lev Foundation, reported on Sunday that they have opened a vocational training program that offers its services free of charge, calling it “Israel’s first digital training program.”
Netanyahu led the nation into the “highest unemployment rate in the West,” Meretz leader Nitzan Horowitz said Sunday, adding that both parts of the Katz plan are “outrageously stingy when compared to what is done in the world.”
“There is money, and we’re talking about countries that are poorer than Israel,” he said.
Industrial data for France and Italy was “much better than expected,” Bank Leumi said Sunday in a press release, adding that the past week offers “further evidence of the financial recovery within the Euro bloc.”
It also reported a drop in the US unemployment rate, with 1.3 million people seeking work last week, a fifth of what the number was in early April, when it was 6.7 million per week.
Leumi tied it to the “reopening of the US economy despite the ongoing increase in the number of those infected with coronavirus.”


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